Did Soviet Elderly Employment Respond to Financial Incentives? Evidence from Pension Reforms

Arbeitspapier

This study answers the open question of whether workers respond to financial incentives in a command economy. To do this, I evaluate pension reforms in Soviet Russia in 1964 and 1969 that allowed pensioners to receive a greater share of their pensions if they worked, resulting in a progressive elimination of benefit reduction rates. Variation in group eligibility and variation in benefit reduction rates in eastern and western regions allow for the use of several difference-in-differences frameworks. I collect and digitize novel data from the Soviet archives on pensioner employment, constructing the first database of the Soviet old-age labor market. I find that Soviet pensioners are responsive to financial incentives. By 1969, after the benefit reduction rate fell from an average of 47.8 to 24.1 percent, pensioner employment rates rose by 5.7 percentage points, representing a 47 percent increase. Finally, I provide illustrative estimates of the employment elasticity with respect to the average net-of-tax rate that range from 0.6 to 1.4.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 12790

Classification and Topics

• Classification: Wirtschaft ; Demographic Economics: Public Policy ; Retirement; Retirement Policies ; Social Security and Public Pensions
• Subject: pension ; retirement ; employment ; Soviet economy

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Malkova, Olga
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/215186
• Last update: 10.03.2025, 11:43 AM CET